Tag Archives: HSA

Health Care Costs

Chronic Care

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The problem:

For the 47 percent of Americans with multiple chronic diseases or conditions, health care costs increase dramatically. The average Medicare patient with one chronic condition sees four physicians a year, while those with five or more chronic conditions see fourteen different physicians a year. In 2002, beneficiaries with five or more chronic conditions accounted for 76 percent of Medicare expenditures. [link; gated, but with abstract]

The obvious solution: more conferences, more papers, more research grants. Isn't that how we solve problems in other markets?

See my post at the Health Affairs blog for a description of how some employers are solving the problem with Health Savings Accounts.

Health Alerts

Why Health Care Costs So Much

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Greg Dattilo and Dave Racer are two insurance men with lots of experience and understanding of what’s right and wrong in U.S. health care. Every couple of years they write a book, and they’ve just published Why Health Care Costs So Much: The Solution – Consumers.

It’s a rare book (actually a “booklet”) about health policy that is fun to read (Top Ten Myths of American Health Care being another recent example). Plus, at 80 pages (including drawings) and available in bulk for only $1.50 each, you can buy a box and hand them out like religious tracts. Continue reading Why Health Care Costs So Much →

Health Alerts

UnitedHealthcare Studies CDHC

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The company has compared results over a five-year period for 266,000 consumer directed health (CDH) plan enrollees using Health Reimbursement Arrangements (HRAs) with 147,000 preferred provider organizations (PPO) enrollees. After adjusting for demographics, health status, etc., here are the results:

  • Pharmacy costs were 18% to 23% lower in the CDH plans and medical costs were 4% to 8% lower.
  • Overall costs were 7% to 9% lower in the CDH plans, with the savings growing through time (employers saved 10% and 12% in 2006 and 2007, respectively).
  • About 82% to 87% of employer savings were the direct result of utilization decreases rather than cost-drifting to employees. Continue reading UnitedHealthcare Studies CDHC →
Health Insurance

Health Affairs Slams CDHC

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Jamie Robinson and Paul Ginsburg have paired up in Health Affairs to take another shot at consumer driven health care. This is one of the most peculiar articles I’ve read on the subject. You can tell which author wrote which part of the piece. Ginsburg (Center for Health System Change) has long been a skeptic who is willing to look at the evidence. Jamie Robinson (UC Berkeley), on the other hand, has been consistently foaming-at-the-mouth hostile. About a year and a half ago he gave a speech to the Consumer Driven Summit where he declared the death of consumer driven health care (CDHC) in favor of what he termed “managed consumerism.” He had a list of about ten particulars, but as we wrote at the time, he was wrong on every single one. He just hadn’t bothered to look at the evidence. Continue reading Health Affairs Slams CDHC →

Health Alerts

A Health Plan for Barack Obama

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One of the best kept secrets in the last election was John McCain’s health plan. When focus groups revealed that ordinary voters had a hard time understanding the McCain plan, his campaign decided it was better not to explain it at all.

Other than two editorials in the Wall Street Journal (one by yours truly), I believe no McCain backer of substance really explained the McCain plan anywhere in print. Also, the only clear explanation on the Internet of how it all might work was at my blog. This left the field open for Barack Obama supporters to distort and mischaracterize the McCain plan, including some ideas that Obama’s health advisors supported before they became Obama advisors!

This was all very personally disappointing, since the McCain plan is based on Sen. Tom Coburn’s plan, which in turn draws on an article that Mark Pauly and I wrote for Health Affairs some years ago.

Yet there may be a silver lining here after all. As it turns out, to even begin to make good on the promises he has made, Barack Obama needs key elements of the McCain plan. He also needs key elements of Mitt Romney’s health reform, about which he has already had complimentary things to say. He can also borrow an idea or two from Sens. Ron Wyden and Bob Bennett. For that matter, he needs Pauly and Goodman, too. Here is how it might work.

Note: I’ve done versions of this for the Health Affairs blog and for the National Journal’s health blog. Continue reading A Health Plan for Barack Obama →

Health Insurance

Blue Cross Survey

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The Blue Cross Blue Shield Association has released its 2008 survey of member experience in CD Health plans. There is a lot of information here, not all of it positive:

  • 70% of consumers report that an HSA-eligible product is (now) available to either them or their spouse/partner.
  • Blue Cross Blue ShieldApproximately 25% of consumers who are given a choice of plans choose an HSA-eligible product, but the percentage choosing an HRA has dropped from 23% in 2007 to 12% in 2008.
  • There is very little difference between those who choose a CDHP plan and those who choose a non-CDHP in terms of age, income, or health status.
  • People in HSAs are far more likely to be concerned about the cost of care, to track their expenses, and to choose lower-cost options for treatment. They are also more likely to participate in wellness programs.
  • Both groups are equally likely to comply with treatment for prevention and for chronic care, but people in CDHPs saved a lot of money due to reduced utilization – $616 per member for those who had a choice of plan and $1,074 per member in a full replacement group.
  • The percentage of people in an HSA-eligible program who do not plan to open an account has grown from 29% in 2007 to 46% in 2008. Nearly half of them (48%) say they don't see the value in having an account and 30% say they can't afford to make a contribution.
Health Alerts

Daschle

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With Tom Daschle slated to become the next HHS Secretary, there has been a mad rush to get a copy of his book, Critical: What We Can Do About the Health Care Crisis, which apparently no one had previously read. Since booksellers can't possibly meet the demand, here is my brief attempt to satisfy your curiosity.

The main ideas: Medicaid expansion, Federal Employee Health Benefits Program (FEHBP) for everyone who wants to enroll, Medicare for the nonelderly as a FEHBP option, a play-or-pay mandate for individuals, income-based, refundable tax credit subsidies (both at work and away from work), a play-or-pay mandate for employers, electronic medical records, a national health board ("to establish a single standard of care for  every other provider and payer"…covering every disease from cancer to diabetes  and even depression), preventive care, dental health, mental health, long-term care, home care, community health centers and combating obesity. Continue reading Daschle →

Health Insurance

Good News on the HSA Front

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HSA PiggybankWellPoint has a new report on consumer directed health plans (CDHPs):

  • Employers who adopted a CDHP in 2006 saw their cost decline, while the cost for non-CDHPs rose between 7% and 10%.
  • People in a CDHP were more likely to have a choice of plan.
  • The CDHP was more likely to be chosen by families with children.
  • People enrolled in CDHPs were more likely to use preventative care than people in non-CDHPs (3.1% higher for women and 8.8% higher for men).
Health Insurance

Obama Advisor Advocates HSAs

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Roger Ferguson, president and CEO of TIAA-CREF and a member of the Transition Economic Advisory Board assembled by President-elect Barack Obama, includes the following in an op-ed in the Wall Street Journal:

Encourage health-related savings. According to the Employee Benefit Research Institute, a couple that retires today will need from $200,000 to $635,000 to pay out-of-pocket health-care costs (above Medicare). Few private-sector employers offer workers an account to save for such costs. Last year's agreement among the Big Three automakers and the United Auto Workers to establish tax-free trusts for worker health is an approach gaining favor among academic institutions. Now Congress needs to enable people with these accounts to leave any unused balance to heirs. This will encourage people to hold on to their savings until the last years of their lives, when health-care money is most needed.

Health Insurance

Hatch Health Bill

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The Family and Retirement Health Investment Act of 2008 (S.3626) has been introduced by Senator Orrin Hatch. The full text of the bill is here.

Here is a summary of what is in the bill:

Purchase of Any Health Insurance with HSA Funds Allowed. Allows anyone with funds in an HSA account to pay the premium for their HSA-qualified policies regardless of their circumstances. Under current law, people can only use their HSA account to pay for health insurance premiums when they are receiving federal or state unemployment benefits, or on a COBRA continuation policy from a former employer. Continue reading Hatch Health Bill →